Fraud: An American History from Barnum to Madoff

Balleisen (Navigating Failure), associate professor of history at Duke University, explores America’s ambivalent attitude toward con-artistry in this colorful survey history of business fraud and the fitful attempts to suppress it. In American fraud’s 19th-century golden age, adulterated commodities, shoddy manufactures, counterfeit bank-notes, inflated stocks, Barnum-esque hoaxes, predatory sales contracts, and Ponzi schemes galore were mainstays of commerce. More recently, Balleisen reveals that the methods have kept pace with sociopolitical changes, as evidenced by Medicare fraud, credit default swaps, and more Ponzi schemes. He counterpoints the nature of the swindles with the growing formal—and informal—“anti-fraud state” of postal inspectors, government financial and trade regulators, criminal prosecutors, class-action lawyers, and muckraking reporters (who sometimes colluded with stock scams instead of exposing them). Balleisen shows how anti-fraud regulations were perennially weakened by Americans’ grudging admiration for clever con-men, industry lobbying, the doctrine of caveat emptor (the notion that buyers are responsible for avoiding scams), and fears that cracking down too harshly on fraudulent promises might dampen the investor enthusiasm powering the economy. Balleisen’s lucid, engagingly written mix of institutional and legal history, behavioral economics, and entertaining anecdotes illuminates this land of bilk and money. Illus. [em](Feb.) [/em]